The test of e-gov: efficiency and effectiveness

Show me the savings!

In a memo earlier this month, the Office of Management and Budget told agencies to demonstrate savings from e-government initiatives.

Agencies must:

Identify systems that are due to end or be severely modified. These include payroll or travel systems and, in some cases, financial management systems.

Develop baseline cost estimates by Sept. 30 for each investment identified under the first task. OMB is providing agencies with a cost measurement framework to capture current and future costs. OMB expects this exercise to take about 45 days to complete.

Measure actual costs of the investments on an ongoing basis, starting no later than Sept. 30.

'[OMB] places the heavy emphasis on cost savings almost to the point where you are setting up expectations that every e-government initiative will save money. That is not always the case.' Kim Nelson, former EPA CIO

Rick Steele

Although the Office of Management and Budget has long touted savings as the chief benefit of e-government initiatives, some current and former government officials say the White House could be leaving out a critically important measure'effectiveness'in their efforts to gain congressional support.

But quantifying effectiveness is far from an exact science, the officials said, and some e-government and Line of Business Consolidation initiatives actually will result in higher costs for a handful of agencies, even though the government overall will save money.

'The one thing that is a little troubling is, when you look ate-government, there are really two drivers: efficiency and effectiveness,' said Kim Nelson, former Environmental Protection Agency CIO and current executive director of e-government in Microsoft Corp.'s U.S. Public Sector business.

'Effectiveness is how you meet citizen needs in a way that is citizen-centric,' she said. '[OMB] places the heavy emphasis on cost savings almost to the point where you are setting up expectations that every e-government initiative will save money. That is not always the case. One more important component is better serving the citizens.'

This, Nelson and others admit, is much harder to measure, although it is essential if the administration hopes the e-government initiatives will ever win over congressional appropriators, who have taken their usual skepticism to new heights in this year's crop of appropriations bills.

In the latest effort to convince lawmakers, Karen Evans, OMB's administrator for IT and e-government, recently told agencies to begin by Sept. 30 measuring savings by developing baseline cost estimates and identifying projects due to be replaced, shut down or modified because of an e-government or Lines of Business initiative.

OMB said it wants agencies to include in their cost analysis government and contractor data, including personnel, material and supply, and other costs such as facilities, maintenance, repair, travel and training.

Along with savings, Evans wants agencies to measure cost avoidance. OMB will request the first set of cost savings and avoidance data in November, as it puts together the annual e-government report to Congress. The rest of the time, OMB expects to collect data twice a year.

But while government and industry executives believe the information is readily available, many believe OMB should be finding ways to measure the effectiveness of e-government as well.

Doing so will be difficult, but it would provide a more accurate reflection of the benefits e-government is producing, even if it shows that some agencies are not saving money, these officials said.

'We are trying to build a system with a solid foundation,' Nelson said. 'Some agencies will wind up paying more than before, but the tradeoff is [that] the citizens are better served.'

Another former agency CIO echoed Nelson's concerns. 'I don't think they ought to limit it to cost savings'[OMB] should also talk about functionality,' said the former official, who requested anonymity. 'Users get what they didn't have before.... Employees do self-service, which the government didn't have five years ago.'

The data OMB wants will no doubt vary by agency, with some showing considerable savings from e-government initiatives and others less, officials said.

'For some agencies that are less mature, there are very strong benefits,' said one federal official who works on e-government matters and also requested anonymity. 'For agencies more advanced, it may not be as much. I expect that agencies, when they collect the data and present it factually [as required under the OMB memo], it will not be colored and in some cases, facts will show for [certain agencies] that e-government is a negative. If you look at it governmentwide, most, if not all, will show some positive benefit.'

Single repositoryAs an example, Microsoft's Nelson points to E-Rulemaking, one of the original 25 Quicksilvere-government projects. Under the initiative, an interagency task force led by EPA developed a single repository for agency rulemaking at www.regulations.gov.

Some agencies that already had an electronic docketing system may not see significant benefits or savings from E-Rulemaking, Nelson said. But agencies that did not have such a system could've spent a considerable amount of money building one. E-Rulemaking eliminated much of that cost, she said.

'That is something I'm not sure will get accounted for' in the OMB memo, she said. 'Many smaller agencies saw [E-Rulemaking] as a huge bargain for $200,000 a year.'Nelson estimated that a small agency might have spent $1 million on setting up its own e-docketing system. 'The back end may be a different cost, but the front end is the value to many agencies,' she said.

The challenge, then, is to demonstrate this to appropriators, who tend to view the government vertically rather than with the horizontal view e-government requires, these officials said.

If an e-government project results in higher costs for a particular agency, its appropriators will not look kindly upon that program, officials said.

A senior IT government official, who also requested anonymity, said there is dichotomy in how the administration and appropriators view e-government. Add to that the fact that the very nature of most e-government initiatives makes it a 'hard message' to sell, and OMB has been fighting an uphill battle for a long time.

'Back-office functions aren't sexy,' this official said. 'They don't make headlines at home. Yet, if you compare [government] to business, everyone says the government is more expensive to run. But the primary reason we're more expensive is [that] it is not sexy to talk about cost savings. I don't think it's a message Congress gets.'

Margaret Wicker, spokeswoman for the Senate Appropriations Committee, would not comment specifically on the OMB memo but said that any additional information agencies provide helps lawmakers as they craft appropriations legislation.

A spokesman for the House Appropriations Committee was unavailable for comment.

Getting the data right is critical to e-government's success, Nelson said.

'It is important for agencies to document the efficiency and the effectiveness,' she said. 'That is the full picture. One without the other presents a distorted view that isn't accurate. OMB recognizes it, but my concern is that the data call's emphasis is on the cost side and not a comparable column for the effectiveness side.'